Diversified Business Strategy Working

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Diversified Business Strategy Working
Sept. 17, 2008
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AGM Agenda
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JMMB Group Results (2007-8)

• Group Profit relatively stable, from J1.09b
  to1.06b
• Revenues held stable from J3.384b to 3.324b
  during aggressive build-out year
• Investment in diversified business model for JMMB
  Jamaica
• 28 in Admin costs
• Staff cost increased by 17 driven by inflation
  and increase in staff resources required to
  operate the new business lines
• Developmental investments (one-off) comprised 67
  of incremental increase of 317m
• JMMBs Associate Companies Contribution ( by
  209)
• CMMB TnT and Barbados rebounded with a 145
  in profitability
• Profitability by 30 for IBL, before tax

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JMMB Group Results (2007-8)

• Total JMMB Group Assets by 14, from 89.6b to
  102b
• Driven by
• JMMB Jamaica Retail base grew by 5.5b to close
  the year with 50b under management
• Continued strong client loyalty and satisfaction
• Despite active competition from alternative
  schemes
• Successful Preference Share Offer, oversubscribed
  by 500 (2.5b)
• NII by 6 to 1.535b
• Despite volatility in interest rates in the local
  market and the fallout from the US sub prime
  crisis
• Turnaround driven by Investment Management
  capability
• Fee Income and Commissions by 35 to J321m
• These increases offset Gain on Securities Trading
  a 13 or 1.468b

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JMMB Group Results (2007-8)

• Consistent growth in retained profits to
  J7.099b, an of J741m or 12 over last FY,
  2007
• Reduction in total equity relates to unrealized
  fair value losses on our available for sale
  portfolio
• We continue to maintain our dividend distribution
  policy ranging from 15 to 30 of profits
• Profits retained are reinvested for growth and
  expansion.

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Corporate Social Responsibility 2007-8
Recognizing and accepting our social
responsibility, we are actively and publicly
involved in charitable/voluntary activities
across our society

• Committee for the Upliftment of the Mentally Ill
  (CUMI) Childrens Programme
• Jamaicans for Justice (JFJ)
• 21 Days of Christmas
• donations to 21 non-profit organisations
  throughout Jamaica
• SOS Childrens Village
• Supporting Jamaicas Drive for Excellence in
  Sports
• JAAA Meet
• Gold Sponsorship of Reggae Boyz

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CMMB 2007-8 Diversified Business Strategy

• Threefold increase in net profits from 11m to
  35.4m
• Barbados subsidiary returned to profitability
• Net interest income increased 112 from TT56m to
  TT119m due to
• Asset growth
• Higher spreads
• Interest Income increased by 8.5 due largely to
  a 7.3 increase in CMMBs Investment Portfolio
  and the generation of higher portfolio yields
• Total assets increased by 9 to over 8b
• Shareholders equity improved by 10 to 231m

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IBL Group 2007-8 Diversified Business Strategy

• Became BILLION DOLLAR Bank
• The Groups total assets increased from TT860m
  as at March 2007 to TT1.085b as at March 2008
• Asset Growth of 26

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IBL Group 2007-8 Diversified Business Strategy
Group Profit Before Tax for the 12-month period
closed at TT11.43m, an increase of 29.5 against
the pro-rated prior 12 months period of TT8.82m

• Major financial achievements during the period
  included the reduction in the non-performing
  loans as a percentage of total loans from 7.08
  in 2003 to 2.09 in 2008

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Expanded Our Main Branch - Chaguanas
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JMMB BDI America 2007-8 Diversified Business
Strategy

• JMMB acquired 80 of Puesto de Bolsa (local
  brokerage firm) and opened in October 2007
• To enable sale of products to wider market
• Full Licence for Puesto be Bolsa received in Feb.
  2008
• Company now fully operational and returned profit
  in March
• Satisfied all regulatory requirements
• REPO approved by the Superintendence of
  Securities
• Based on positive market outlook (post-election),
  we are projecting increased profitability for
  2008-9 FY

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AGM Agenda
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JMMB Group Results Q1, 2008-9 Diversified
Business Strategy Working

• Group Profit After Tax grew to J376.6m, an of
  J145.4m or 63 (J231.2m in Q1, 2007-8)
• Contribution from Associated Companies by 46
• Consistent with projections, profit from
  Associated Companies continue to show growth and
  to J150m compared to 27m in Q1, 2007-8

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JMMB Group Results Q1, 2008-9 Diversified
Business Strategy Working

• Group Total Assets grew to J114b, a significant
  of J22.3b or 24 (2007-8 J91.6b)
• Reduction in total equity for Q1 relates to
  unrealized fair value losses on our available for
  sale portfolio

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JMMB Group Results Q1, 2008-9 Diversified
Business Strategy Working

• Group Operating Revenue grew to J818m an of
  J145.6m or 22 (J672.3m in Q1, 2007-8)
• Significant growth in
• Net Interest Income by 37 to J490m, due to
• Increased contribution from Regional Partners
• Fees and Commissions by 51 to J54m, due
  mainly to
• Retail Credit (Sure Advance Plus) Commercial
  and Corporate Credit
• Corporate Solutions (Pensions, Structured
  Financing and Insurance)
• Gains from Cambio trading by 73 to J37m
• Earnings per Stock Unit by 63 to J0.26

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AGM Agenda
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Outlook on Macro Environment - Local

• As at July-08 the 12-month inflation rate stands
  at 26.2, the highest since the index was
  adjusted with new weights

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Outlook on Macro Environment - Local

• Energy prices have recently abated with crude oil
  prices falling below US100
• Due to concerns about global growth and change in
  investor sentiment
• Impact
• Domestic inflation will come down but remain high
• Not much upward pressure on interest rates

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Outlook on Macro Environment - International

• The Federal Reserve, the US central bank, reduced
  interest rates to support the US economy and
  created facilities to improve liquidity in the
  financial system.
• US government provided a fiscal stimulus package
  to help support consumer spending
• The US government tried to support the economy
  through fiscal support, by giving tax rebates to
  consumers in an attempt to get them to spend more
  (consumption spending accounts for over 2/3 of US
  economy)
• Despite attempts by the Federal Reserve to lower
  interest rates and facilitate greater liquidity
  in markets, the disruption to financial markets
  has continued for over a year (since Aug. 2007).
• Other international central banks have also had
  to facilitate liquidity to financial markets
• The economies of UK and Euro-area are threatened
  with a possible recession

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Stunning Events in the International Financial
Markets

• Major Wall Street Brokerage house, Bear Stearns
  taken over in March 2008
• Supported by Government bail-out
• Government bail-out of Fannie Mae and Freddie Mac
• Unexpected filing for Chapter 11 by Lehman
  Brothers
• Up to Fri. Sept. 12, rated investment grade and
  considered solvent
• Government bail-out of AIG (Sept. 16)
• Continued significant volatility across the world
  financial markets
• Extreme fluctuations in market prices (upwards
  and downwards)

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AGM Agenda
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Outlook for Future Diversified Business
Strategy Works in Volatile Times (2008-9)

• Strong Q1 performance puts us in an even better
  position to manage through these unusual and
  significantly volatile times in the international
  financial markets
• We are actively monitoring the dynamic situation
• No impact on our core business
• In our OWN portfolio we have minimal exposure
• Investments in new business lines and expansion
  of current business lines, have started to and
  will continue to reap results in 2008-9
• Retail Credit (Sure Advance Plus) Commercial
  and Corporate Credit
• Corporate Solutions (Investment Services,
  Pensions, Structured Financing, Cambio and
  Insurance)
• Continued Greenfield Expansion
• Profitability from DR
• Assessing expansion opportunities in Central
  America Free Trade Area (CAFTA)
• Expect continued Growth in profitability from
  Regional Businesses
• Continued rebound in profitability from CMMB
• Continued Growth in profitability from IBL

This represents the exposure. Due to level of
volatility, it is too early to determine the
potential loss.
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Outlook for 2008-9 FY - Jamaica Diversified
Business Strategy Working

• Continued Growth in Retail Asset Management
  Business
• Client driven product offerings
• Tax Shelter (most competitive rates in the market
  place)
• Cambio
• International Money Market products (US, CDN,
  Euro, GBP)
• Expansion of retail channels to increase and
  optimize client access
• Agency in Sav-La-Mar
• 5 new ETMs
• Mandeville and May Pen in operation
• Montego Bay, Sav and Corporate Area by March 2009
• Sales Strategy bolstered with Financial Advisors
  supporting the Branch Network
• Credit Capability retail (Sure Advance Plus),
  commercial and corporate financing now in place

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Outlook for 2008-9 FY - Jamaica Diversified
Business Strategy Working

• Corporate Solutions offers expanded suite of
  products and services for Institutional and
  Mid-Tier Corporates
• Cash Management, Investment Services, Pensions,
  Commercial Loans, Cambio, Corporate Financing and
  Insurance
• Market launch throughout JMMB network in Oct.
  2008
• Build-out Corporate Unit in Kingston
• Strong presence in Montego Bay, Ocho Rios and
  Mandeville
• To deliver value-added services and products to
  this client segment in true JMMB fashion
• Integration of Equities and Insurance Brokerage
  continues with the Retail and Corporate Client
  base
• Bundling of products and services
• e.g. Motor Vehicle Loans and Insurance Equities
  and Pensions Investment Management

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Outlook for 2008-9 FY - Regional Businesses
Diversified Business Strategy Working in
Volatile Times

• CMMB
• Continued stability in interest rate environment
  in TnT and Barbados
• Focus now on building out their retail presence
• Further expansion into Eastern Caribbean through
  new branch in St. Vincent
• Regional Business Development Officers covering
  the remainder of the Organization of Eastern
  Caribbean States (OECS)

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Outlook for 2008-9 FY - Regional Businesses
Diversified Business Strategy Working in
Volatile Times

• IBL Group
• In the current year and going forward IBL will be
  expanding its Retail Bank network at strategic
  locations across the twin island.
• Consistent with strategy to establish a
  national branch network, IBL is actively
  engaged in building the Port of Spain branch
  which will be the flagship location for Northern
  Trinidad
• expected to open in Dec. 2008
• Expanding their Personal Banking through Home
  Banking and the deployment of a highly motivated
  and aggressive sales team.

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Proposed Site Port of Spain Branch(December
2008)
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Proposed Site Port of Spain Branch(December
2008)
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Outlook for 2008-9 FY - Regional Businesses
Diversified Business Strategy Working in
Volatile Times

• JMMB BDI America
• Strategy
• Aggressively going to the market this year
  Corporate and HNW market penetration
• Developing Capital Markets business line to
  generate fee income
• Expansion to Central America
• We entered the financial services sector in DR
  and began the development of the money market
• Building a fixed income/money market portfolio
• Attractive returns to our clients, attractive
  spreads for JMMB WIN/WIN

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AGM Agenda
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JMMB Group in the Business Lifecycle 1992
2008Diversified Business Strategy Working
Maturity Largest Brokerage presence in the
Caribbean. Investment in business diversification
fine-tuning business model for sustainable
growth
Expansion Sustainable growth driven by 5
Strategic Imperatives On the look for
Acquisitions
Expansion Weathered financial sector meltdown in
Ja Hypergrowth, Leading Brokerage in Jamaica,
began to diversify regionally
Early Growth Established the money market in
Jamaica
Regional Client base gt120,000 3rd largest
financial institution in Jamaica (J121.9b in
AUM)
Grounded in our Value Driver Client Intimacy
1992
2006
1998
2002
2010
2014
2018
as of June 30, 2008
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AGM Agenda
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Q A
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AGM Agenda
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• Thank You!